In an ambitious endeavour to expand its business footprint internationally, Mahindra & Mahindra Ltd will soon set up a vehicle assembly plant in Sri Lanka. This is the first time that a genuine automobile manufacture plans to enter the vehicle assembly arena in the country after over seven years of doing business, Nalin Welgama, Chairman, [...]

The Sunday Times Sri Lanka

Mahindra setting up a vehicle assembly plant in Sri Lanka

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In an ambitious endeavour to expand its business footprint internationally, Mahindra & Mahindra Ltd will soon set up a vehicle assembly plant in Sri Lanka.

This is the first time that a genuine automobile manufacture plans to enter the vehicle assembly arena in the country after over seven years of doing business, Nalin Welgama, Chairman, Ideal Motors Ltd told Business Times.

India’s US$17.8 billion Mahindra Group Company would assemble vehicles from complete knock down (CKD) kits with 30 per cent value addition of local components along with Sri Lankan manpower to meet high demand, he revealed.

Preliminary arrangements were made to set up the plant in the country in 2011 and almost all the ground work has been finalised, he confirmed adding that Mahindra Group Managing Director Anand Mahindra is very keen to go ahead with the project.

He noted that in fact Mr. Mahindra told him that his aim is to assist Sri Lanka to become a South Asia distribution hub for their vehicles.

The company is looking at assembling the all new compact Mahindra SUV, the KUV 100 initially, he said, adding that the aim is to offer a good quality car for a reasonable price for first-time car buyers and youth.

The Mahindra KUV 100 is offered in Sri Lanka with 1200 cc mFalcon engine: a 1.2-litre G80 petrol unit that produces 82 bhp and 115 Nm of torque.

This engine has a 5-speed manual transmission. ARAI-rated fuel economy figure for the petrol KUV100 is 18.15 km/l .

Ideal Motors is now working to get necessary approvals from the Finance Ministry and the Board of Investment to set up the vehicle assembly plant in a two acre block of land in the Colombo suburbs like Horana, Mr. Welgama disclosed.

This plant would produce vehicles not only for Sri Lanka, but also for markets in Pakistan and Bangladesh, effectively becoming a South Asia distribution hub, he said pointing out that initially it will fulfill local demand.

Sri Lanka is one of the top three overseas markets from 90 countries for Mahindra which has many assembly plants in Africa and other regions.

Mahindra & Mahindra has over 50,000 vehicles on the roads of Sri Lanka, he reiterated, revealing that the decision to set up a vehicle assembly plant was taken due to the changing vehicle import tax structure.

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